IT Service Delivery Models

By Boris Pevzner

I love models and frameworks. They give context to individual activities and pieces of data, let us see the forest behind the trees, help us to achieve better understanding, spark creativity, and ultimately drive us to “make things better.” (Besides, as a trained physicist, I find models to be intellectually satisfying, pure and simple!)

Which is why I was looking forward to the talk by Colleen Young at the Gartner Symposium today. Colleen is Gartner’s Distinguished Analyst and is the driving force behind the ISCo (Internal Service Company) model. But even more importantly, she is a remarkably clear and structured thinker and communicator on the subject of IT service delivery.

Coleen’s presentation didn’t disappoint. She took the audience through what she called “the model muddle” of IT service delivery and constructed a neat “model stack” consisting of the IT Business Model, Operating Model, Service Delivery Model, and Organizational Architecture. Here is a quick synopsis.

The IT Business Model is determined by how the business views the value of IT. This calls for the IT organization to adopt one of the three dominant IT business models: utility-oriented (“IT supports the business”), enablement-oriented (“IT enables the business”), or transformation-oriented (“IT drives the company”). None of these are “better” or “worse” than others; they merely reflect the expectations of the business from its IT organization. Of course, these expectations are not static; in fact, according to Colleen’s formidable sampling of large IT shops, most businesses are now in the process of migrating from the “utility view” to the “enabling view.”

The next layer of the “model cake” is the IT Operating Model. From the operational point of view, an IT shop can be centralized (“one CIO”), decentralized (“multiple independent CIOs, one for each business unit), or hybrid (“a federated approach, where multiple business unit-aligned IT organizations are managed in a coordinated way, usually with some shared functions”). Which IT Operating Model is right for you? – again, the answer depends on the business culture, and whether the accountability pattern is more heavily weighted toward the enterprise as a whole or the individual business units that comprise it.

The third model dimension is the IT Service Delivery Model, which reflects how the IT organization chooses to address its service delivery functions. It could be siloed, process-based, organized around shared services, “Internal Service Company” (ISCo), or profit-based. The goal here is to pick the model that is most efficient and best aligned with the business objectives.

Finally, at the very bottom level of the “model stack” is the actual Organizational Architecture, which includes IT organizational structure, sourcing decisions, process automation, governance, and human capital management. These are essentially the “implementation details” that emerge almost organically from the more deliberate decisions around the models described above.

Depending on where you are in the “model stack,” the recipe for driving improvement is different. In most cases, however, it includes the drive to increased standardization, clearer definition of services and development of an enterprise IT service catalog, and active process improvement initiatives.